RESEARCH INSIGHTs

Effects Of Fairtrade On The Livelihoods Of Poor Rural Workers

by Eva-Marie Meemken, Jorge Sellare, Christophe N. Kouamé and Matin Qaim

The main focus of this study was to explore the impact of Fairtrade on workers hired by small farmers. It is based on a large-scale data collection in Côte d'Ivoire where 50 cocoa cooperatives were surveyed, including 250 workers employed by the cooperatives, 500 cocoa farmer members of these cooperatives and 250 workers employed by these farmers. Half of these cooperatives were Fairtrade certified.1 Aspects like wages, working conditions, household welfare and poverty were explored following robust methodological approaches.

The research shows mixed findings for Fairtrade. On the one hand, it confirms that Fairtrade certified farmers have higher yields and receive higher prices, and that workers employed by Fairtrade cooperatives not only earn higher wages than workers in non-certified cooperatives but also have more stable incomes throughout the year.

The same, however, was not found to be true for farm workers on either certified or non-certified farms. It is worth noting, though, that both cooperative workers and farm workers do receive more additional non-income benefits in certified cooperatives compared to non-certified cooperatives but neither have written contracts.

1 Eight of these were UTZ certified and nine were UTZ and Rainforest Alliance certified.

The study confirms that:

The reasons for this last finding came down to a lack of rules and close monitoring but also point to the likelihood that farmers lack sufficient financial resources to pay the workers higher wages. The concerns raised relate to aspects where Fairtrade needs to do more to ensure that the benefits of Fairtrade reach everyone in smallholder cooperatives, including those working at farm level.

• Certification helps cooperatives attract more members, sell larger quantities of cocoa and provide a wide range of services.

• Fairtrade increases the annual wages of cooperative workers by about 160%, raises the likelihood of receiving at least the minimum wage by 59% and reduces the likelihood of living below the poverty line by 35%.

• Fairtrade increases the likelihood of having a written contract by 62% for cooperative workers.

• no significant Fairtrade effect is observed for farm workers.